A popular restaurant now files bankruptcy after unexpected closures led the company down to its last four locations.
Melt Bar and Grilled once had more than a dozen locations, but now it’s down to just four.
The grilled cheese restaurant is now seeking legal help to pay off its debts, though its owner is planning to keep the company afloat.
Its four restaurants are all located in Ohio.
The company said inflation was to blame, according to Nation’s Restaurant News.
It has between $1 million and $10 million in liabilities.
In a statement to the local Fox affiliate, the company’s owner, Matt Fish, blamed changes in the industry.
“Navigating the restaurant industry in the post-pandemic world with growing economic issues is becoming increasingly difficult,” Fish said.
However, they said Chapter 11 would help keep the company going.
“This gives us the best opportunity to reorganize and rebuild the company,” he said.
He asked that customers stay loyal to the chain.
“We have not only survived but have thrived for almost 18 years in the Cleveland restaurant scene,” he added.
“I refuse to let the company I have put my entire life into for the past nearly 2 decades end.
I sincerely hope our staff, friends and loyal guests will continue to support us through this difficult decision and transition.”
It’s unclear if any more locations could close as a result of the bankruptcy filing.
However, Fish confirmed to Fox 8 that the four locations are currently still operating.
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Also Read: Another Mall Clothing Retailer Now At High Risk of Bankruptcy
Other Economy News Today
An essential company now files a surprising bankruptcy after miscalculating demand for its inventory after the Covid-19 pandemic.
Supply Source Enterprises, a leading provider of branded and private label cleaning products and personal protective equipment, on May 21 filed for Chapter 11 protection to seek a sale of its assets.
Supply Source brands include The Safety Zone and Impact Products.
The Guilford, Connecticut debtor listed $50 million to $100 million in assets in its petition and $180 million in funded debt, which includes $80 million owed on a term loan credit facility, $60 million owed on an asset-based loan, and about $40 million in unsecured debt.
Before the Covid-19 pandemic, which generated huge demand for cleaning supplies and personal protective equipment in 2020, Supply Source had been consistently profitable with stable single-digit growth, according to a declaration from the debtor’s Chief Restructuring Officer Thomas Studebaker.
Once the pandemic hit in 2020, the debtor had substantial growth due to high demand for safety, hygiene and sanitation products
The debtor reported adjusted Ebitda of $93 million in 2020 which was nearly a 300% increase over the previous year.
However, the company’s financial performance deteriorated in subsequent years.
Based on the unprecedented demand in 2020, the company commissioned an industry study in early 2021 that concluded that the Covid-19 pandemic would fundamentally change the cleaning supplies and protective equipment industry and market for its products.
The study also estimated that the company’s Covid-related growth would likely be sustained through 2024.
In contemplation of continued customer demand at elevated prices, based on the study’s data, the debtor increased purchases of inventory even though the costs were higher due to supply chain constraints during the pandemic.
Despite the study’s assurance that growth would be sustained for years, the pandemic’s positive effect on the market faded by the end of 2021 and demand for PPE decreased to normal rates, reports TheStreet.
The reduction in demand led to large amounts of excess inventory that the company could not sell in the same quantities and prices.
The excess inventory forced the debtor to secure additional storage space, which increased storage costs.
These factors tightened the company’s liquidity and led to a decline in annual revenue in 2023 by 26% from 2022, resulting in a negative 2023 Ebitda of $13 million.
The debtor’s liquidity issues led to it being overdrawn on its asset-based loan facility by $30 million.
The ABL lender in February 2024 swept the debtor’s bank accounts, further impacting the company’s financial distress.
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Also Read: This Massive Mall Retailer Is Now Closing In California
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